By Inae Riveras
SAO PAULO (Reuters) - Despite world concerns about global warming and the impact of biofuel production on food prices, policy makers have done little to boost international trade of cheaper and more environmentally friendly fuels for consumers, experts said.
Import tariffs and trade barriers have prevented, for example, an increase in cane-based ethanol exports from Brazil, the world's most competitive producer of the biofuel. Shipments are actually expected to be lower in 2008 than last year.
In Europe, biodiesel producers have been hit by an increase in U.S. imports, which benefit from subsidies if they are blended with mineral diesel. To counterattack, the EU bloc may impose countervailing duties, industry leaders said.
The EU has also been affected by large volumes of Argentine biodiesel at cheap prices, which are encouraged by preferential taxes. The product is charged a 5 percent tariff by Argentina's government, while edible oil exports have a 30 percent duty.
"Some countries are trying to solve a world problem, which is global warming and climate change, just with national solutions," said the head of Brazil's Sugar Cane Industry Union (Unica), Marcos Jank, at the Reuters Global Agriculture and Biofuel Summit.
According to Unica, cane-based fuel has higher productivity than other feedstocks. Sugar cane yields seven liters of ethanol per hectare compared with three liters with corn.
Production costs are lower, and energy efficiency -- amount of energy used in the process versus energy resulting -- is five times higher with cane than with corn, Unica said.
Moreover, its impact on food prices is much more limited than the one caused by corn or wheat. Almost a third of the next U.S. crop may be turned into fuel, increasing upward pressure on food inflation. Continued...
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